Textile industry sources feel that the special package for textile and apparel sector has addressed some of the long pending demands of the industry.
These include fixed-term employment, making employees contribution to EPF optional, and additional TUF (Technology Upgradation Fund) subsidy among others.
Welcoming the slew of measures, Tirupur Exporters’ Association President A Sakthivel said India would be able to regain its position in apparel exports within three years with policy support.
India, which topped in apparel exports between 1995 and 2000, has been pushed to third position, next only to Bangladesh and Vietnam, since the beginning of this century.
Hailing the timing of the package, Southern India Mills’ Association Chairman M Senthilkumar said: “Coming as it does when the industry is battling a long drawn recession due to delayed FTAs and market access limitations, this package will help the entire value chain – from fibre to fabric – owing to increased demand in the long run.”
Both Sakthivel and Senthilkumar opined that the decision to bear 12 per cent of the employer’s contribution of Employee Provident Fund Scheme by the Centre for new employees in the garment sector, during the initial three-year period, will benefit the sector to a great extent.
Further, the decision towards making EPF optional for employees earning less than ₹15,000 will help such workers take more money home. “In the garments sector, there are a large number of employees who work for a short term and prefer to take full wages without deduction,” he said, adding: “This will also make jobs in the textile sector more attractive, especially for women in rural areas.”
The introduction of fixed-term employment will facilitate the garments sector manage production demand during peak periods and enable the sector grab export orders, Sakthivel said.
Appreciating the increase of subsidy under the Amended TUF Scheme from 15 to 25 per cent, the SIMA chief said: “This will not only bring in new investments, but also motivate existing units to go for forward integration and increasing exports.”